Taxability Analysis and Nexus Evaluation

312-701-1800
info@ycstax.com

Do you know how your home state taxes your products and services? What about other states or local jurisdictions where you currently or plan to conduct business?

Your company's presence, or activity in a state is referred to as "nexus." If your business attends trade shows or has traveling sales persons, repair persons, or other agents who perform installation or maintenance in a state where the company is not registered, these activities may create nexus in that state.

Having nexus without being registered can create serious tax liabilities. Companies unknowingly can be conducting taxable transactions and fail to collect tax from customers, thus creating their own liabilities. Furthermore, when a company fails to file tax returns, they are not eligible to limit their exposure to the states' statute of limitation. This oversight allows the states to tax transactions back to the first day nexus was created.

Limit these tax liabilities with a taxability analysis and nexus evaluation from Yetter Consulting Services. We will research and analyze your company's products and services in the states where you do business or where you're planning to expand. Next, we prepare a taxability matrix for each of the jurisdictions. The matrix is an easy-to-read grid that lists each product and service, its taxability and the applicable citation. YCS also can include tax type, rate, local tax and situs rules for intrastate transactions.

To determine past tax obligations, YCS reviews and analyzes the multi-state business activities conducted by your company and compares them with the activities addressed by these states as creating nexus. Although our main focus is the determination of where your company has established sales tax nexus, we also include some discussion regarding potential liability for other taxes. We then quantify the potential tax exposure and provide alternatives of how to proceed. Recommended actions could include voluntary disclosure, prospective registration, activity monitoring or even deregistration.

Most states have programs that provide an opportunity for businesses that have recently become aware of their tax obligations to voluntarily come forward to meet those obligations. The states usually provide some incentives to these businesses. YCS can assist with any of the recommended actions including negotiations, registration and liability calculation.